The aim is to allow one year after publication of the standards before implementing them and to review the standards once they have been applied for two years, IASB Chairman Sir David Tweedie said during the conference, which was jointly sponsored by the AICPA and the International Accounting Standards Committee Foundation.
“We guarantee, if there’s still an area of major controversy, the boards will look at it again—it’s not set in stone,” Tweedie said.
Diverse presentation of financial statements resulting from different standards is one of the problems Tweedie said the IASB wants to concentrate on moving forward. Having a set of standards people understand will increase credibility and investing across borders, and result in compatibility across companies and political boundaries, FASB Chairman Robert Herz said.
However, he emphasized the need for one set of standards without country-specific variations, which he said is the major problem in the European Union and results in inconsistencies.
One key area FASB will monitor moving forward is loans.
During meetings in New York the week of the October conference, both groups said they would like to focus on basic standards relating to income taxes, but Herz said they may have to wait for resources to free up because conceptual changes may be needed.
Another area is insurance contracts, which now have numerous standards. Herz would like to see a common standard.
The SEC released its draft Strategic Plan for Fiscal Years 2010–2015, which includes, among other goals, a continued commitment “to promote the establishment of high-quality accounting standards by independent standard setters” and support for “a single set of high-quality global accounting standards.”
The draft Strategic Plan is a statement of the SEC’s mission, vision, values, strategic goals, planned initiatives and performance metrics.
The Commission’s plan outlines the following major strategic goals:
1. Foster and enforce compliance with the federal securities laws.
2. Establish an effective regulatory environment.
3. Facilitate access to the information investors need to make informed investment decisions.
4. Enhance the Commission’s performance through effective alignment and management of human, information and financial capital.
To further its goal of promoting high-quality accounting standards, the SEC says it will:
- Strengthen and support FASB’s independence and maintain the focus of financial reporting on the needs of investors, consistent with the recommendations set forth by the SEC Advisory Committee on Improvements to Financial Reporting;
- Support FASB’s efforts to improve financial reporting, including recent standard-setting initiatives such as off-balance-sheet accounting and accounting for financial instruments; and
- Promote high-quality financial reporting worldwide through, among other things, support for a single set of high-quality global accounting standards and promotion of the ongoing convergence initiatives between FASB and the IASB.
To foster high-quality audits, the SEC says it will work closely with the PCAOB on the promulgation and interpretation of auditing standards to address current issues in the capital markets.
The SEC’s draft Strategic Plan is available at tinyurl.com/yl86mmx. The comment period ended Nov. 16.
The SEC Office of the Chief Accountant issued updated guidance on how the agency’s staff interprets accounting rules related to the oil and gas industry. The principal revisions of the guidance, known as Staff Accounting Bulletin no. 113, include:
- Changing the price used in determining quantities of oil and gas reserves;
- Eliminating the option to use post-quarter-end prices to evaluate write-offs of excess capitalized costs under the full cost method of accounting;
- Removing the exclusion of nonconventional methods used in extracting oil and gas from oil sands or shale as an oil and gas producing activity; and
- Removing certain questions and interpretive guidance that are no longer necessary.
The guidance is available at sec.gov/interps/account/sab113.htm.
FASB has added new XBRL functionality to its Accounting Standards Codification Web site, asc.fasb.org.
“The new XBRL functionality provided by the Codification Web site will help entities as they prepare or plan to prepare XBRL financial statements using the U.S. Financial Reporting Taxonomy,” said FASB Chairman Robert Herz in a press release. “Users will be able to very easily identify the XBRL elements associated with specific Codification paragraphs.”
The current changes to the FASB Codification follow the SEC’s rule effective April 13, 2009, that requires all public companies to begin providing XBRL versions of their SEC filings over a three-year phase-in period. Approximately 500 of the largest public companies, each with a worldwide public float greater than $5 billion, began filing for interim financial statements with periods ending on or after June 15, 2009.
All other large accelerated filers (with public floats below $5 billion that file under U.S. GAAP) are expected to start filing in XBRL in June 2010. In 2011, all remaining companies using U.S. GAAP and all foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the International Accounting Standards Board will be subject to the same requirements.